Russia has been fighting dirty banks, tax schemes and cash-outs for 10 years: The Bell sums up this struggle in the “Land of Cash” series. In the first article, we told how the authorities fought the shadow economy. This text is about how this struggle has changed the cash market. Contents Where to get cash How the “zoo” works What role do banks play Business hacks …
A saleswoman from the Moscow market “Sadovod”, who introduced herself as Adile, shows the correspondent of The Bell a notebook in which she writes down the released goods and amounts in neat handwriting in a column. The “accounting statements” of thousands of small retail outlets in all Moscow wholesale markets look the same. On the second floor of the Gardener, Adilya sells tights and socks. On average, she should make at least 5 thousand rubles a day. On weekdays, it rarely gets so much, but over the weekend it is possible to catch up. Adilya immediately warns that she only accepts cash. “Sberbank Online” management does not approve. At the end of the working day, it will study the notes in the notebook and take the proceeds.
After the total cleansing of dirty banks and shell companies in the second half of the 2010s (we talked about this in detail here), it was markets like Sadovod that became the main source of cash. The largest trade hubs, where goods come from China, Vietnam, Kyrgyzstan, Kazakhstan and other countries, are located in Moscow, the smaller ones are in Yekaterinburg, Novosibirsk, St. Petersburg and other cities. Cash is accumulating both in retail and wholesale.
“Zoo” is the name given to cashing out through the markets by The Bell interlocutors, lawyers representing the interests of businessmen in courts related to cashing out.
In the spring of 2019, the media reported on searches at Sadovod, as well as at Food City and Moscow (all owned by God Nisanov’s Kievskaya Ploshchad) and explained them by the Central Bank’s fight against cashing out.
“We had a number of meetings with the Central Bank, we discussed issues related to the topic of working capital of our tenants,” Nisanov later said. “The checks they carried out concerned banks and financial organizations renting space from us. No illegal actions were identified as a result.”
According to the official version of the Ministry of Internal Affairs, the purpose of the searches was to check compliance with immigration laws. The Ministry of Internal Affairs did not answer The Bell’s question about the results of the check.
So far, Moscow wholesale markets are working as before.
How the zoo works
Merchants from regional markets come to wholesale depots, spending from 100,000 to several million rubles at a time. They usually pay in cash. In the regions, unlike Moscow, there is an imputation. This form of taxation allows you to pay tax once a year depending on the size of the business, after which the volume of goods passed through the outlet is not controlled. Soon, however, the imputation will be canceled. How this will change the scheme is not yet clear.
At the end of the day, cash flows to the curators of the cash business. As a rule, these are people in the management of the market. As a reward, non-resident cash providers receive about 5% on top to personal accounts or IP accounts.
Buyers of cash most often pay for it by bank transfer. The struggle of the authorities with the shadow financial market has led to a sharp rise in prices. If back in the early 2010s, according to the deputy chairman of the Central Bank Dmitry Skobelkin, they took 2-3% of the amount for cashing out, now it is 15-30%. Interlocutors of The Bell from the cash business agree with this assessment.
Also, Moscow cashiers often use cryptocurrency in their schemes, Vladimir Kitsing, a lawyer for the Knyazev and Partners bureau, notes (Vedomosti wrote about this in detail). The media wrote that during searches at Sadovod and Moskva in the spring of 2019, the police found several mining farms. Merchants from the “Gardener” quite calmly reacted to the questions of The Bell correspondent about the possibility of buying a crypt somewhere on the territory of the market: “Of course, you can buy everything here.”
In most markets, cashing out is controlled by national diasporas, say The Bell interlocutors involved in this business. It is not difficult to determine the diaspora that dominates the market – just take a walk through the malls. Some diasporas, along with traditional cash-out schemes, practice original ones, such as, for example, the method of cashing out maternity capital “Cashed Halal”.
The Central Bank began to publish statistics on cash withdrawals in the banking sector only in 2015. For four years, the volume of this market, according to the regulator, has decreased significantly. In the first half of 2019, for example, the Central Bank estimated it at only 48 billion rubles. Even if we extrapolate this figure for a year, it will turn out to be 6 times less than it was in 2015. We spoke in detail about the fight against cash withdrawals in the first material of the “Country of Cash” series.
However, the regulator does not disclose its methodology. Two interlocutors of The Bell, who are familiar with the work of the Central Bank, suggested that it is based on data from the Ministry of Internal Affairs, that is, only on criminal cases that have already been opened. The Interior Ministry did not respond to The Bell’s request. An interlocutor of The Bell, who himself provides cash-out services, says that in reality the market should be larger: only in Moscow – tens of billions of rubles a year, in all of Russia – hundreds of billions.
From small private banks, cashing has moved to large state-owned ones. As a rule, cashiers use bank branches in the areas where they are based – long-term agreements with managers who are responsible for opening accounts, registering LLCs and individual entrepreneurs and issuing money to them are important. Local police and tax officials are always up to date. They get something like a subscription fee. The transportation of money is often accompanied by members of criminal gangs. In the case of a “kid”, they solve the problem in the way that was customary in the 1990s – up to the use of torture, The Bell interlocutors say.
The Central Bank is aware of the situation. Vedomosti wrote that the regulator asks banks to separately report on service points located on or near large regional clothing and food markets. But what the Central Bank does with this information is unknown.
With tight supervision, cashers have to constantly improve their schemes. For the exchange of experience and know-how, thematic forums and chats in Telegram are used.
One of the main topics is KYC of banks. Know Your Customer (KYC) is a bank compliance procedure: before providing a service, the bank must determine whether the client meets certain requirements. These requirements are changing. Bank employees provide cashiers with fresh examples of KYC, updated taking into account the recommendations of the Central Bank. They publish and disassemble them. As a result, schemes can change literally on a weekly basis. From the last: the regulator asked to check whether the main profile of the legal entity specified during registration in the Unified State Register of Legal Entities matches the actual activity. By law, a company can do everything that is written in the list of specializations. But now the cashiers make sure that the transfers go strictly according to the profile of the main specialization.
Another popular topic is drops and drop guides. Droppers, or droppers who withdraw money from ATMs, are the weak link in the cash-out chain. We talked about how one of the most popular schemes that use drops works here. Often these are people with a criminal record or simply those who have nothing to lose. Drop guides are those who command them.
Since the actions of drops are unpredictable (here we talked about how a couple of drops could steal 5 million rubles from the sensational Tinkoff Bank case), a service appeared – “drop verification”. Well-known cashiers in the party keep scam registries.
Photos and scans of passports are regularly published by, for example, the Telegram channel “Scammers in cash”. Recently, he promised to develop a single database of scammers, in which there will be a search by TIN and phone number.
To protect themselves from cheating, cashiers use a special service: “Garant”. This is a forum, the administrators of which keep the money until the customer has received the cash, and after that they transfer it to the cashiers. The scheme is borrowed from popular services like Airbnb.
Another insurance option is the publication of transactions. Cashers’ nicknames and amounts can be published in the public domain, as well as reviews of successful or unsuccessful money transfers.
The authorities are trying to stop the spread of knowledge about cashing out. In the database of court cases, you can find dozens of decisions to block sites with a general explanation: “Advertising services for cashing out money.” For example, recently the prosecutor of Izhevsk requested a block for the site ccc.mn – and now it really only opens through a VPN. In the Republic of Mari El, a local regional publication was recently fined for publishing the text “Big cash out”, believing that the article contains instructions for cashing out. We hope this material does not suffer the same fate.